California utility to close San Onofre reactors

WASHINGTON – In a new setback for the U.S. nuclear power industry, Edison International said Friday it will permanently close the two reactors of its San Onofre plant in California, ending a contentious battle over whether they can be repaired and operated safely after cracks were found last year in the steam generator system.

The two reactors, built at a total cost of around $2.1 billion, once provided 17 percent of the power generated by the utility. The loss of the units has forced Edison International and its Southern California Edison subsidiary to rely more heavily on renewable energy sources and new supplies of natural gas.

The company said it will be able to maintain electricity supplies for Southern California, barring damage to transmission lines from an unusually hot summer or fires. Edison Chief Executive Theodore Craver Jr. said he spoke to California Gov. Jerry Brown on Friday morning about plans to ensure stability of the electrical grid.

“This is very much part of the uncertainty we are talking about and we are anxious to resolve going forward,” Craver said in a conference call with reporters.

The closure of the plant comes three days after MidAmerican Energy, owned by Berkshire Hathaway, scrapped plans to build a small modular reactor in Iowa while sticking with its plan to build up to 656 wind turbines in the state.

Although the San Onofre reactors were licensed to operate until 2022, critics said the utility and its main contractor, Japan’s Mitsubishi Heavy Industries, had hidden risks of a new steam generator system they installed in reactor 2 in 2009 and reactor 3 in 2010 and that Edison needed a license amendment — a potentially lengthy process.

The new system, designed to last 20 years, failed in less than two after vibrations caused many of the 9,727 heavy alloy tubes in each steam generator to rub against one another. Reactor 2 was already closed for maintenance, but its sister unit was shut down after a 310-liter per day leak was discovered in January 2012. San Onofre’s reactor 1 was in operation from 1968 to 1992.

The decision to permanently shut down the reactors follows a May 13 ruling by the Nuclear Regulatory Commission’s Atomic Safety and Licensing Board. Weighing a challenge from Friends of the Earth, the board unanimously rejected the company’s arguments for restarting unit 2 at 70 percent capacity, saying a lengthier license amendment process was required.

Craver, the chief executive, said seeking a license amendment, and fending off legal challenges, would delay a restart so much that it would no longer be worthwhile.

Nuclear power foes rejoiced at the news.

“After years of fighting toe-to-toe with the billion-dollar nuclear industry, WE WON!” said an email sent by Friends of the Earth, which had argued to nuclear regulators that the plant’s steam generators were the heart of the reactors and needed more scrutiny.

“We have long said that these reactors are too dangerous to operate and now Edison has agreed,” said Erich Pica, president of the group.

California Sen. Barbara Boxer, chairman of the Senate Environment and Public Works Committee, said she was “greatly relieved.”

“This nuclear plant had a defective redesign and could no longer operate as intended,” the Democrat said in a statement. “Modifications to the San Onofre nuclear plant were unsafe and posed a danger to the 8 million people living within 50 miles (80 km) of the plant.”

Though the plant will stay closed, the controversy is still wide open.

Craver said Edison International will seek compensation from Mitsubishi for the faulty steam generator design, while consumer groups are seeking the refund of extra costs, including for replacement fuel. Craver said costs subject to potential refund amount to about $1.3 billion.

Edison International said it will take a charge of $450 million to $650 million and cut its earnings outlook by 20 cents a share.